Fitch affirms & withdraws National Savings Bank’s ratings

May 20, 2020 (LBO) – Fitch Ratings has affirmed and withdrawn Sri Lanka-based National Savings Bank’s (NSB) Long-Term Issuer Default Rating (IDR) of ‘B-‘ with a Negative Outlook.

The affirmation of NSB’s IDRs, Support Rating and Support Rating Floor reflects that there have been no material changes from the last review on 5 May 2020.

Fitch has chosen to withdraw the ratings for commercial reasons.

KEY RATING DRIVERS

NSB’s IDRs and Outlook are driven by our expectation of modest sovereign support, indicated by its Support Rating Floor, which is aligned with the sovereign’s ‘B-‘ IDR. Fitch has not assigned a Viability Rating to NSB, as it is a policy bank. We believe extraordinary state support stems from its policy mandate of mobilising retail savings and investing them in government securities. The NSB Act contains an explicit deposit guarantee, and Fitch believes the authorities would support the bank’s depositors and senior unsecured creditors to maintain confidence and stability in the system.

RATING SENSITIVITIES

Rating sensitivities are no longer relevant as the ratings have been withdrawn.